Major update for parents on baby formula prices after Iceland boss slammed high costs
THOUSANDS of parents are paying more than they need to for baby formula because of a lack of competition in the market, a government watchdog has warned.
At the moment there are two dominant baby formula companies – Danone and Nestle – who account for over 90% of all sales.
As a result, there are “limited incentives” for these manufacturers to compete to offer the best price, the Competition and Markets Authority (CMA) warned.
The regulator has been investigating the baby milk market after finding it was vulnerable to higher than inflation price rises.
A probe into the supply of formula was launched earlier this year and the results will be published in February 2025.
The news comes after the boss of Iceland Richard Walker last year hit out at “exploitation” of new parents and called for action to be taken in the industry.
The report said: “Unlike in many other grocery categories – there is little pressure on manufacturers or retailers to shelter customers from increases in manufacturing costs, which have largely been passed on quickly and in full.”
Over the past few years it has become more expensive to manufacture infant formula and these costs have been passed on directly to customers.
Parents often choose baby formula for the first time when they are in vulnerable situations such as in hospital straight after birth.
Often they make the choice when they do not have access to clear, accurate and impartial information, the watchdog warned.
Parents are also often under a lot of pressure to do what is best for their baby.
As a result, they can often choose a more expensive product as they assume that a higher price will mean it is better quality.
This is not true as the NHS advises that “it does not matter what brand you choose, they’ll all meet your baby’s nutritional needs, regardless of price”.
Parents also often listen to advice from friends and family when choosing a formula, which means the brand’s reputation plays a much larger role in the decision making.
Sarah Cardell, chief executive of the CMA, said it is concerned that companies “don’t compete strongly on price”.
She added: “We have identified options for change, but now want to work closely with governments in all parts of the UK, as well as other stakeholders, as we develop our final recommendations.”
How to save on your supermarket shop
THERE are plenty of ways to save on your grocery shop.
You can look out for yellow or red stickers on products, which show when they’ve been reduced.
If the food is fresh, you’ll have to eat it quickly or freeze it for another time.
Making a list should also save you money, as you’ll be less likely to make any rash purchases when you get to the supermarket.
Going own brand can be one easy way to save hundreds of pounds a year on your food bills too.
This means ditching “finest” or “luxury” products and instead going for “own” or value” type of lines.
Plenty of supermarkets run wonky veg and fruit schemes where you can get cheap prices if they’re misshapen or imperfect.
For example, Lidl runs its Waste Not scheme, offering boxes of 5kg of fruit and vegetables for just £1.50.
If you’re on a low income and a parent, you may be able to get up to £442 a year in Healthy Start vouchers to use at the supermarket too.
Plus, many councils offer supermarket vouchers as part of the Household Support Fund.
In the meantime, it has set out several potential options which could help to improve the industry and reduce the cost for parents.
It wants to provide new parents with clear, accurate and impartial information, for example in hospitals.
The CMA may also allow companies to publicise their prices and price reductions, which they are currently not allowed to do.
It also wants to strengthen labelling and advertising rules as branding is a large part of the reason that parents choose a certain product.
This could be done by requiring manufacturers to use entirely different branding for their infant and follow-on formula.
The CMA may also implement stricter rules around certain messages on packaging.
In the long term the government may also be forced to take more significant action to bring down costs, such as introducing price caps.
Currently, an 800g tub of Aptamil Advanced 1 First Infant Baby Milk formula costs £18 at Tesco.
Meanwhile, the same size tub of SMA PRO First Infant Baby Milk formula costs £13 at the supermarket.
In comparison, earlier this year a trendy baby formula brand launched a cut-price “affordable” version.
The Bonya formula is around a third cheaper than most other major brands on the market and contains the same nutrients.
Its 800g First Infant Milk 1 from Birth costs just £8.45 at Tesco.
There is just one retailer in the UK which sells its own brand, which is Aldi.
All baby formula must contain the same nutritional composition by law, so cheaper brands have all the nutrients babies need.
When at the supermarket it’s important to make sure that you are shopping around to get the best deal.
You can use a comparison website such as Trolley, My Supermarket Compare and Priceable to check the cost of infant formula at different supermarkets.
Always check the price per gram or ml to make sure you are comparing like-for-like.
This should be in small print on the price label in the shop.
What help is there for parents?
If you receive certain benefits and are pregnant or have at least one child under the age of four then you can apply for Healthy Start vouchers.
You will get:
- £4.25 each week of your pregnancy
- £8.50 each week for children from birth to one year old
- £4.25 each week for children between one and four years old
The money will stop after your child’s fourth birthday or if you no longer receive benefits.
If you are eligible you will be sent a Healthy Start card with money on it that you can use in some UK shops.
The money will be added onto this card every four weeks.
You can use the card to buy:
- Plain liquid cow’s milk
- Fresh, frozen and tinned fruit and vegetables
- Fresh, dried and tinned pulses
- Infant formula milk based on cow’s milk
To be eligible for the scheme you must be receiving one of the following benefits:
- Income support
- Income-based jobseeker’s allowance
- Child tax credit if your family’s annual income is £16,190 or less, and not getting working tax credit
- Universal credit if your family’s monthly earned income is £408 or less from employment
- Pension credit
You can apply for the scheme on the NHS website.
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